TATA STEEL LONG PROD 2018-19 Annual Report Analysis

Sun, 31 Mar

TATA STEEL LONG PROD has announced its results for the year ended March 2019. Let us have a look at the detailed performance review of the company during FY18-19.

TATA STEEL LONG PROD Income Statement Analysis

• Operating income during the year rose 26.6% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 20.8% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 14.6% in FY19 as against 23.3% in FY18.
• Depreciation charges decreased by 5.9% and finance costs decreased by 6.9% YoY, respectively.
• Other income grew by 34.1% YoY.
• Net profit for the year declined by 11.7% YoY.
• Net profit margins during the year declined from 18.0% in FY18 to 12.5% in FY19.

TATA STEEL LONG PROD Income Statement 2018-19

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Net Sales	Rs m	7,837	9,921	26.6%
Other income	Rs m	431	578	34.1%
Total Revenues	Rs m	8,268	10,498	27.0%
Gross profit	Rs m	1,827	1,447	-20.8%
Depreciation	Rs m	123	116	-5.9%
Interest	Rs m	32	30	-6.9%
Profit before tax	Rs m	2,102	1,878	-10.6%
Tax	Rs m	693	634	-8.5%
Profit after tax	Rs m	1,409	1,244	-11.7%
Gross profit margin	%	23.3	14.6
Effective tax rate	%	33.0	33.8
Net profit margin	%	18.0	12.5

Don't Miss: Best Chance to Access Midcap Stocks Research at 80% OFF

TATA STEEL LONG PROD Balance Sheet Analysis

• The company's current liabilities during FY19 stood at Rs 5 billion as compared to Rs 4 billion in FY18, thereby witnessing an increase of 20.9%.
• Current assets rose 5% and stood at Rs 9 billion, while fixed assets rose 18% and stood at Rs 9 billion in FY19.
• Overall, the total assets and liabilities for FY19 stood at Rs 18 billion as against Rs 17 billion during FY18, thereby witnessing a growth of 11%.

TATA STEEL LONG PROD Balance Sheet as on March 2019

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Networth	Rs m	9,865	10,836	9.8
Current Liabilities	Rs m	3,741	4,524	20.9
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	16,533	18,292	10.6
Current assets	Rs m	8,965	9,379	4.6
Fixed Assets	Rs m	7,568	8,913	17.8
Total Assets	Rs m	16,533	18,292	10.6

TATA STEEL LONG PROD Cash Flow Statement Analysis

• TATA STEEL LONG PROD's cash flow from operating activities (CFO) during FY19 stood at Rs 1 billion, an improvement of 144.0% on a YoY basis.
• Cash flow from investing activities (CFI) during FY19 stood at Rs -124 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY19 stood at Rs -371 million on a YoY basis.
• Overall, net cash flows for the company during FY19 stood at Rs 507 million from the Rs -2 billion net cash flows seen during FY18.

TATA STEEL LONG PROD Cash Flow Statement 2018-19

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-18	Mar-19
Cash Flow from Operating Activities	Rs m	411	1,003	144.0%
Cash Flow from Investing Activities	Rs m	-2,131	-124	-
Cash Flow from Financing Activities	Rs m	-202	-371	-
Net Cash Flow	Rs m	-1,922	507	-

Current Valuations for TATA STEEL LONG PROD

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 80.8, an decline from the EPS of Rs 91.5 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 761.5, stands at 27.6 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 3.2 times, while the price to sales ratio stands at 1.2 times.
• The company's price to cash flow (P/CF) ratio stood at 10.8 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*
Sales per share (Unadj.)	Rs	508.9	644.2
TTM Earnings per share	Rs	91.5	80.8
Diluted earnings per share	Rs	31.2	27.6
Price to Cash Flow	x	27.2	10.8
TTM P/E ratio	x	29.6	27.6
Price / Book Value ratio	x	1.5	1.4
Market Cap	Rs m	14,944	14,692
Dividends per share (Unadj.)	Rs	20.0	12.5

Ratio Analysis for TATA STEEL LONG PROD

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 2.1x during FY19, from 2.4x during FY18. The current ratio measures the company's ability to pay short-term and long-term obligations.

Interest Coverage Ratio: The company's interest coverage ratio deteriorated and stood at 63.2x during FY19, from 65.7x during FY18. The interest coverage ratio of a company states how easily a company can pay its interest expense on outstanding debt. A higher ratio is preferable.

• Profitability Ratios

Return on Equity (ROE): The ROE for the company declined and down at 11.5% during FY19, from 14.3% during FY19. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

Return on Capital Employed (ROCE): The ROCE for the company declined and down at 17.6% during FY19, from 21.6% during FY18. The ROCE measures the ability of a firm to generate profits from its total capital (shareholder capital plus debt capital) employed in the company.

Return on Assets (ROA): The ROA of the company declined and down at 7.0% during FY19, from 8.7% during FY18. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*
Current ratio	x	2.4	2.1
Debtors’ Days	Days	274	289
Interest coverage	x	65.7	63.2
Debt to equity ratio	x	0.0	0.0
Return on assets	%	8.7	7.0
Return on equity	%	14.3	11.5
Return on capital employed	%	21.6	17.6

To see how TATA STEEL LONG PROD has performed over the last 5 years, please visit here.

TATA STEEL LONG PROD Share Price Performance

Over the last one year, TATA STEEL LONG PROD share price has moved down from Rs 923.7 to Rs 761.5, registering a loss of Rs 162.2 or around 17.6%.

Meanwhile, the S&P BSE METAL Index is trading at Rs 11,355.1 (up 2.3%). Over the last one year it has moved down from 13,322.0 to 11,355.1, a loss of 1,967 points (down 14.8%).

Overall, the S&P BSE SENSEX is up 16.3% over the year.

(To know more, check out historical annual results for TATA STEEL LONG PROD and quarterly results for TATA STEEL LONG PROD)

Read: Latest Annual Report Analysis of TATA STEEL LONG PROD